According to Hurriyet daily the move appears to be part of a strategy by President Vladimir Putin to boost Moscow’s Middle Eastern political and economic influence, which was weakened by the collapse of the Soviet Union.
Rosneft’s investment comes amid a crisis in Kurdistan’s relations with the central government in Baghdad since the region held an independence referendum last month.
The United States called the referendum a provocation but Moscow has effectively supported the vote, saying it understood Kurdish aspirations for independence.
Rosneft said it would own 60 percent of the pipeline, with current operator KAR Group retaining 40 percent. Sources familiar with the deal said Rosneft’s investment in the project was expected to total about $1.8 billion.
That comes on top of $1.2 billion that the Russian firm, which has struggled to raise Western loans due to U.S. sanctions, lent Kurdistan earlier this year to help fill holes in its budget. Rosneft also agreed to invest another $400 million in five exploration blocks.
“I plead with you not to forget Kurdistan,” the region’s resources minister Ashti Hawrami told an industry conference in Verona, Italy, on Oct. 19, hours before signing the pipeline deal with Rosneft boss Igor Sechin, one of Putin’s top allies.
Sechin called on Baghdad and Erbil to settle their differences.
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